Richard Branson on his way to space (Virgin Galactic photo)
According to market estimates, Virgin Orbit today (Tuesday) is filing for bankruptcy protection in the US after it was unable to obtain the financing it needed. The news comes shortly after the company’s last mission failed and its rocket crashed into the ocean.
The company ceased operations on Thursday and fired almost all of its employees. Its stock traded around 20 cents on Friday, leaving it with a market capitalization of about $74 million.
Not long ago, Virgin Orbit would have been seen as another success as part of founder Richard Branson’s Virgin empire, when they presented a model of the company’s rocket in the middle of Times Square and in December 2021 the company traded at a value of almost 4 billion dollars.
More in-
Branson, Virgin Orbit’s largest shareholder, was not willing to fund the company anymore, as reported by CNBC. Instead, he began to hedge against 75% of his shares through a series of debt rounds. This debt gives the British billionaire first priority over Virgin Orbit’s assets in the event of bankruptcy.
While Virgin Orbit presented a flexible and alternative approach to launching small satellites, the company was unable to achieve the rate of launches necessary to generate the revenue it badly needed.
This is a story that is often told in the history of the space industry: technologies are exciting, or even innovative, but they are not necessarily profitable and justify their existence. Virgin Orbit has launched six missions since 2020, with only four of them being successful.
The company dug itself into a hole of almost a billion dollars, flying only two flights a year, while its salary expenses climbed. The company’s leadership was aware of the deterioration of the situation and the lack of progress, and even considered changes last summer to make the business leaner. In practice, no plan was implemented for this purpose and the fall was only a matter of time.
Comments to the article(0):
Your response has been received and will be published subject to the system policy.
Thanks.
for a new comment
Your response was not sent due to a communication problem, please try again.
Return to comment